As the world moves deeper into the energy transition, infrastructure has emerged as a strategic pillar for long-term investors—combining stable income, inflation protection, and exposure to secular growth themes such as renewables, digital networks, and sustainable transport. For advisors, the challenge lies in translating these complex global trends into actionable portfolio strategies for their clients. 

Gautam Bhandari, Co-Founder, Managing Partner and Global CIO at I Squared, discusses the evolution of infrastructure from a niche alternative to a mainstream building block of diversified portfolios. Drawing on insights from the launch of ISQ Open Infra and I Squared’s global portfolio, Bhandari explains where there is opportunity, what advisors need to know, and how investors can participate in the multi-trillion-dollar energy transition heading into 2026. 

CM: Over the past decade, infrastructure investing has evolved from a specialized allocation to a central component of institutional portfolios. What’s driving this shift, and why does it matter now? 

GB: There are a few things that have come together at once. First, there’s a genuine, long-lasting need for new and modern infrastructure – McKinsey estimates $106 trillion by 2040 – so this isn’t a short-lived theme; it’s a multi-decade super-cycle. At the same time, governments are stretched. High debt and tight budgets mean a growing chunk of this build-out has to come from private capital. 

From an investor’s point of view, infrastructure hits a rare sweet spot: predictable, long-term, contracted cashflows that behave a bit like bonds, but with growth optionality and inflation-linked revenues. Add to that low correlation to public markets and truly essential demand (think power, data, logistics) and you see why institutions have moved it from a niche line item, to a core holding. For I Squared, our real point of differentiation is our specialist focus on the middle market – where we as investors can protect any downside while also creating real upside by building businesses, not just buying them. 

CM: How do you define “core” infrastructure today–what sectors or subsectors are most relevant? 

GB: To me, “core” is essential services with predictable, durable demand and strong regulatory or contractual protections. That includes regulated utilities, toll roads, long-term contracted power, and now important digital infrastructure such as fiber and data centers, all of which provide the essential backbone for the modern economy. Within those, the sub-sectors that combine longevity with re-industrialization and digitization tailwinds are the most compelling. 

CM: How can infrastructure complement traditional fixed income or real estate allocations in a balanced portfolio?  

GB: Think of infrastructure as a bridge between bonds and equities. Like fixed income, an investment in infrastructure can generate steady, predictable cashflows, but unlike a plain bond it also gives you real operational upside – especially in the mid-market where you can grow businesses. Many infrastructure contracts are inflation-linked, so you’re protecting real returns in a way bonds and traditional real estate often don’t. 

On top of that, infrastructure tends to have low correlation to public markets and has proven to be more stable in volatile times (e.g., COVID). The bottom line is infrastructure provides yield, inflation protection and diversification and, if you’re active and skilled at operating assets like us at I Squared, a pathway to equity-style appreciation as you grow value over time. 

CM: What was the vision behind the launch of ISQ OpenInfra, and how does it aim to democratize access to private infrastructure investing?  

GB: Historically, private infrastructure has been an institutional-only club with big minimum commitments to closed-end funds funded by capital calls. ISQ OpenInfra was built to change that. We wanted to give wealth investors the same access to the kinds of mid-market, platform-built strategies we run for institutions, but in a structure that fits private wealth: lower minimums, simpler liquidity mechanics, no J-Curve and the ability to co-invest alongside our institutional strategies. 

It’s the same investment rigor and the same playbook – platform building, operational value creation – but packaged so more people can participate, without having to be an LP in a large closed-end fund. 

CM: How do open-ended structures change the way individuals can participate in long-duration, capital-intensive assets?  

GB: Open-ended vehicles make the experience a lot more user-friendly. Instead of big one-off subscriptions and capital calls, investors can enter with lower minimums and recurring subscriptions, and they’re fully allocated on day one. That removes a lot of friction for private wealth clients. 

Operationally, it also suits how we build platforms: steady, staged capital deployment, ability to scale the right opportunities, and less timing risk for the investor. You still get exposure to long-duration assets, but in a format that matches how many wealth investors prefer to invest – a more liquid, lower-hassle way to own the same underlying economic exposure. 

CM: Where is I Squared currently seeing the most compelling investment opportunities across the global energy transition? 

GB: Our announcements just in the last few months make the point: we’re backing the full set of infrastructure services that make decarbonization real and resilient: 

• Entek – an advanced-materials manufacturer helping to reshore critical U.S. battery supply chains and enable large-scale electrification. 

• Google / LCI – investments in the digital and power backbone (data centres, transmission and low-carbon power solutions) that underpin AI and cloud growth. 

• Liberty Tire – circular-economy and materials solutions that keep value in the system and cut upstream emissions. 

• NEXS (National Express School) – the school-bus fleet play: electrification, fleet operations and the charging/logistics infrastructure that makes zero-emission mobility practical at scale. 

What unites these deals is that they are practical, scalable, and cash-flowing: industrial solutions, materials innovation, circular economy companies, digital and power infrastructure, and electrified fleets. They address supply-chain resilience, reduce hard-to-abate emissions, and create durable demand for power and logistics. For us, the opportunity is where operational improvement meets structural tailwinds – build platforms, improve operations, and capture compounding value as these sectors evolve. That’s the way you turn transition themes into long-term, investable infrastructure. 

CM: You’ve noted that valuations in mid-market infrastructure remain attractive. What’s supporting that value proposition in the current macro environment? 

GB: There’s still a lot of fragmentation in the mid-market. You don’t have scarcity of assets, and fewer large buyers driving up prices the way you do at the mega-cap end. That fragmentation, paired with real ongoing demand for new capacity (data, grids, manufacturing), means you can buy assets at reasonable entry multiples and add real operational value. In short, good fundamentals plus operational levers equal attractive value. 

CM: How has the exit landscape evolved, and what types of buyers or capital sources are most active today?  

GB: The exit environment for mid-market infrastructure is broader than people realize. You have large private equity and mega-cap managers who like platforms that scale; you have strategic buyers like energy companies and industrials, who want to bolt on growth, and increasingly you have robust secondary and continuation markets. Those secondaries are particularly helpful as they give early investors liquidity, while allowing others to buy into well-de-risked, high-quality assets. 

For us, the platform model creates optionality. If you build a business from the ground up, there are multiple routes to realize value including trade sale, strategic sale, large PE, or a continuation. That diversity of buyers is one of the reasons middle market infra continues to be so attractive. 

CM: Looking out to 2026 and beyond, what role do you expect infrastructure to play in high-net-worth and mass-affluent portfolios?  

GB: I think it follows the same arc it did with institutions with infrastructure becoming a core allocation inside private markets for wealth investors. Why? Because, as we have already discussed, it offers predictable yield, inflation protection, diversification, and real appreciation potential – particularly where you can drive operational improvement. 

We’re in an infrastructure supercycle driven by themes like digitization and AI, and by the fact that much of the world needs new physical assets, not just maintenance of the old. Couple that with constrained public budgets and you get persistent private demand for capital. So, for HNW and mass-affluent clients looking at private markets, infrastructure should be a central, not incidental, part of the mix.